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01/24/2020

TCH increasing RTP payment cap to $100,000

The Clearing House has announced it will increase the general transaction value limit on its RTP® (real time payments) network from $25,000 to $100,000, effective February 1, 2020. Under the new rules, depository institutions on the RTP network are required to accept payments up to $100,000. However, individual participants may set a lower value limit for payments they originate.

01/17/2020

Heightened cybersecurity risk considerations

In response to the heightened cybersecurity risk facing the financial services industry and other critical business sectors, the FDIC and the OCC have issued an interagency statement on heightened cybersecurity risk. The statement focuses on risk management principles that can reduce the risk of a cyber-attack and minimize business disruptions. FIL-3-2020 has also been issued by the FDIC.

The Department of Homeland Security has indicated there is heightened risk of cyber-attack against U.S. targets because of increased geopolitical tension. The current environment provides an opportunity for banks to re-evaluate the adequacy of safeguards to protect against various types of cybersecurity risk. The Heightened Cybersecurity Risk document highlights principles previously articulated by the FDIC and other banking regulators including: business resilience, authentication, system configuration, security tool, data protection, and employee training. Banks can apply cybersecurity risk management principles and risk mitigation techniques to reduce the risk of a cyber attack's success and minimize the negative impacts of a disruptive and destructive cyber attack

01/13/2020

FATF forum on supervision of virtual assets

On January 9, the Financial Action Task Force held a supervisor’s forum in Paris, France, to discuss how to supervise and regulate virtual assets and virtual asset service providers (VASPs). This meeting was the first opportunity for supervisors to discuss how to implement these new measures since the FATF finalized them in June 2019. Supervisors play an important role in ensuring that regulated entities, such as banks and financial institutions, implement the FATF’s standards to detect and prevent money laundering and terrorist financing. The FATF Supervisors’ Forum is an initiative of the Chinese Presidency of FATF to promote more effective supervision by national authorities.

01/13/2020

Fair lending and internet marketing

The Federal Reserve System has published its third 2019 issue of Consumer Compliance Outlook, which features an article on the fair lending implications of targeted internet marketing.

01/10/2020

CFPB and Utah AG to hold joint office hours

The Consumer Financial Protection Bureau and the Office of the Utah Attorney General have announced the first joint office hours to be held as part of the American Consumer Financial Innovation Network (ACFIN). Joint office hours, held as part of ACFIN, provide innovators with the opportunity to discuss issues such as financial technology, innovative products or services, regulatory sandboxes, no action letters, and other matters related to financial innovation with officials from the CFPB and state partners. The joint office hours will be held on January 30, 2020, in Salt Lake City, Utah.

Requests for a meeting during the office hours session must be emailed to officeofinnovation@cfpb.gov by January 17, describing the topic(s) for discussion during the meeting.

01/08/2020

NCUA lists 2020 supervisory priorities

The National Credit Union Administration has announced it is has sent its annual letter to credit unions listing supervisory priorities as well as updates on regulations and the agency’s modernization programs. The priorities listed were:

  • Bank Secrecy Act and anti-money-laundering compliance;
  • Consumer financial protection;
  • Cybersecurity;
  • Credit risk and liquidity risk;
  • Continued monitoring of the implementation of the new standard for current expected credit losses, or CECL; and
  • Planning for the transition from the London Interbank Offered Rate, or LIBOR, as the benchmark for setting interest rates.

01/07/2020

Utah tech company settles with FTC

The Federal Trade Commission has granted final approval to a settlement with a Utah-based technology company related to allegations that the firm failed to put in place reasonable security safeguards, allowing a hacker to access the personal information of more than a million consumers. A complaint filed by the FTC alleged that InfoTrax Systems, L.C. and its former CEO Mark Rawlins failed to use reasonable, low-cost, and readily available security protections to safeguard the personal information they maintained on behalf of InfoTrax’s business clients. As a result of the company’s alleged security failures, a hacker infiltrated InfoTrax’s server, along with websites maintained by the company on behalf of clients, more than 20 times from May 2014 until March 2016. The hacker accessed consumers’ sensitive personal information, including Social Security numbers, according to the complaint.

The settlement, initially reported in our November 13, 2019, Top Story, was placed on the public record for 30 days for consideration of public comments.

12/18/2019

Fed releases December 2019 Compliance Supervision Bulletin

The Federal Reserve Board's Consumer Compliance Supervision Bulletin shares information about Federal Reserve examiners' observations and other noteworthy developments related to consumer protection. The December 2019 issue discusses Federal Reserve supervisory observations regarding fintech, or the use of technological innovation to provide financial products and services. Topics include:

  • Promoting effective fintech risk management
  • Online and mobile banking
  • Managing the fair lending risks of targeted internet-based marketing
  • Federal Reserve fintech resources

12/18/2019

Federal Reserve fintech innovation office hours

The Federal Reserve Board reported yesterday it will hold a series of "fintech innovation office hours" across the country to meet with banks and companies engaged in emerging financial technologies, popularly known as fintech. The sessions will serve as a resource for banks and fintech firms to meet one-on-one with Federal Reserve staff members with relevant expertise to discuss fintech developments and ask questions. The sessions may be particularly helpful to community banks and their potential fintech partners. Sessions will be co-hosted with individual Reserve Banks, with the first session at the Federal Reserve Bank of Atlanta on February 26, 2020.

The Board has also launched a new section of its website specifically focused on fintech innovation.

12/13/2019

FDIC proposes to modernize brokered deposit regs

The FDIC has issued a notice of proposed rulemaking that would modernize its brokered deposit regulations. The proposal would, among other things, modernize the regulatory framework to remove regulatory disincentives to offering deposit accounts to customers through different channels.

The proposal would—

  • establish a new framework for analyzing whether deposits placed through deposit placement arrangements qualify as brokered deposits. These include arrangements between insured depository institutions (IDIs) and third parties, such as financial technology companies, for a variety of business purposes, including access to deposits, as well as IDIs' increasing reliance on new technologies to engage and interact with their customers.
  • revise the "facilitation" prong of the deposit broker definition so that it applies to any person that engages in specified activities, and provide that a wholly owned operating subsidiary be eligible for the "IDI exception" to the "deposit broker" definition under certain circumstances.
  • amend the "primary purpose" exception to apply when the primary purpose of an agent's or nominee's business relationship with its customers in the placement of funds with IDIs. The availability of the primary purpose exception would be clarified for third parties that place deposits through brokerage sweep accounts, under certain conditions, and to third parties whose primary purpose is enabling customers to make payments, under certain conditions.
  • establish an application process for any third party that wishes to use the primary purpose exception, and would require ongoing reporting.
  • continue to consider an agent's placement of brokered CDs as deposit brokering, and such deposits would continue to be reported as brokered

Comments on the proposal will be accepted for 60 days following publication in the Federal Register.

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